Stories from the field

Poverty is a riot of inconsistencies and mysterious shades of complexity.Today, after a long week in the field, I’m wondering how anyone could possibly work their way out of the despair they inherited with birth when so many forces conspire against them, especially women.

Poverty is defined as a condition of unacceptable material deprivation, according to a particular society’s standards of what’s acceptable and what’s not.Poverty is widely acknowledged to be a multi-dimensional condition; however most efforts to measure its extent and severity focus on incomepoverty.Income poverty is measured in relation to a level of income or consumption designated as the minimum needed by a household to avoid poverty.National poverty lines differ by country.Low-income countries like Uganda typically set their poverty lines at the estimated cost of physical subsistence – a bare-minimum diet, plus a modest addition for necessities other than food.The causes of poverty are numerous but a significant root cause is gender disparity; specifically the ability and access that women have to productive assets and services.

In 2000, every country in the world and all leading development organizations agreed to eight Millennium Development Goals (MDGs) to halve world poverty by the year 2015. The eight MDGs are:

Many believe MDG3 – equality for women – is the most important MDG.Empowerment of women is not just about justice or being nice (which I naively assumed).All other MDGs depend upon MDG3: unless the situation of women is purposefully and radically shifted, achieving the other MDGs will be impossible.Women are the key to reducing poverty. World Bank studies show that agricultural production would increase by 20% if women had the same access to resources as men.Investing in women makes economic sense and is a prerequisite for development.

Uganda experienced rapid economic growth over the past two decades.Real gross domestic product (GDP) increased an astonishing 6.5% per annum on average since 1990.Yet, over the same period, 32% of Uganda’s households remained in poverty and 20% are chronically poor.Moreover, 11% of the poorest households moved into poverty for the first time, and there was no measurable increase in the middle class.The country’s population has doubled to thirty one million since the mid 1980’s, the median age is fourteen.

The national planning framework that guides public actions to eliminate the incidence of poverty in Uganda, consistent with the MDGs, is called Poverty Eradication Action Plan, or PEAP.Among a host of human and economic development strategies, PEAP acknowledges the strong correlation between gender disparities and economic progress, and sets forth policies to eliminate gender gaps under the Uganda Gender Policy (UGP).In addition to PEAP and UGP, the national government has enacted strategies to perpetuate its growth and economic development with programs to empower women, improve transportation infrastructure and utility services, and promote rural access to financial services.

The challenges are immense.Take infrastructure as one obvious example.Traffic control systems are non-existent and the roads are very poor – only main roads are even partially paved.Most roads even in the capital city of Kampala are dirt and driving on them is difficult and slow.Traffic is constantly choked and frequently stopped motionless in utter logjams (which, incidentally, seem to always occur at the apex of the day’s heat).Traveling even short distances often seems like an odyssey.Many of the borrower groups we meet are in villages that are only ten or so kilometers outside the city limits, but visiting them can take well over an hour even in a private vehicle and much longer on public transportation.In Uganda’s non-urban areas, the supply of electricity is fragile.There are no ATM’s or Internet.No running water or sewage systems.At night, its pitch dark except for the ambient light of kerosene lanterns and cook stoves.Imagine the effort required just to go to the bank each week, as MFI borrowers must do to safeguard their earnings from thieves and inflation.Transportation and infrastructure are obvious impediments to economic development.

The statistics on gender equivalency are even more disturbing and consequential:

§Sixteen percent (16%) of women are married by age 15 and 53% by age 18.The average Ugandan woman is married at age 17.

§Social norms and values condone gender discrimination, perpetuated by low levels of education and limited access to information.Abuse of rights is socially acceptable.

§Fifty five percent (55%) of MFI borrowers are women; yet women constitute 72% of commerce.More men than women are successful in credit applications and women usually receive smaller amounts, restricting their ability to acquire and control livelihood assets and resources such as land, information and technology, business skills and financial capital.

§Thirty two (32%) of the overall population lives below the poverty line.Higher proportions of women-headed households are chronically poor and more move into poverty than male-headed households and are more likely to sell assets to avoid moving into poverty.

§An estimated 13%, or 1.8 million children, are orphans.Forty percent (40%) live in poverty.

§Eighty three (83%) of women are engaged in agricultural production, yet only 25% control the land they cultivate.Women own only 16% of the registered land.The majority of women only have use rights determined by the nature of the relationships they have with a make land owner – her father, husband or brother.

§Women suffer very high time burdens in pursuing their livelihoods.Women work an average 15 hours a day compared to men who work only 9, and women bear the brunt of domestic tasks.The time and effort required for these tasks, in almost total absence of even rudimentary domestic technology, is immense.This has negative consequences on food safety, household income, children’s education, participation in community life, health and productivity.

§The overall illiteracy rate is 32%; 24% of men are illiterate compared to 38% of women.

Clearly, women in Uganda are at a measurable disadvantage.Fortunately, Kiva works with three exemplary partner MFIs in Uganda that are attacking poverty using methodologies consistent with the MDGs and PEAP.BRAC Uganda, Pearl Microfinance and MCDT Sacco each employs an entirely different approach, but they share three common and significant distinctions: (a) focusing on the lower half of the economically-active poverty spectrum, (b) delivering financial services to rural areas, and (c) providing programs designed predominately for women.

Their programs are working.With the help of Kiva and its local MFI partners, some remarkable people somehow find a path to prosperity, despite overwhelming and seemingly insurmountable obstacles.Meeting them is like receiving a gift.Magdalena is one such person.The enormity of her disadvantage and the context of her life are difficult to comprehend, but it’s impossible to not be amazed and inspired by what she’s accomplished.

Magdalena grew up in an orphanage, abandoned by her biological parents at birth.She lived there until she was 14, when she was required to go out into the world on her own.Imagine being alone in the world, penniless and partially educated, at the tender age of fourteen.Not long after leaving, she was married and starting a family of her own.When asked about her husband, she replies only that “he’s around somewhere”.She is reluctant to share more.He seems to be an uncomfortable topic for her, so I don’t inquire further.In addition to her other hardships, could Magdalena also be a victim of domestic abuse?It’s statistically probable.

A typical boy's quarter

Ten years ago, she lived in poverty in a small, cramped “boy’s quarter” with her four children.To make ends meet, she rented space in a friend’s nearby clothing boutique, and offered alterations and tailoring for the shop’s customers.Her dreams at the time were to complete her children’s education, establish a business of her own and build a family home.They would seem like pipe dreams, given her situation.

Around that time, Magdalena took out a small loan from Pearl Microfinance and a purchased a used Singer sewing machine.Soon, using her savings and another loan, she opened her own small studio.Over the years she steadily built her business and today has established herself as the premier clothing maker in her village.Her studio is attached to her home and is stocked with a wide selection of fabrics, patterns, buttons and threads. She has four sewing machines, two employees and a large and loyal clientele that she has earned through superb craftsmanship and her friendly, honest customer service.

Some of her clients come from as far as Kampala for her fashion designs.Magdalena’s studio is not easy to find, despite sitting less than a hundred yards off the main highway.It sits on a narrow, rutted dirt track, tucked behind a primary school, and there are no street markers or signs advertising her business.But that doesn’t impede her customers from finding her.

Magdalena at work in her studio

She proudly shows me a Gomese, a traditional Ugandan dress, she recently completed and explains the profit model to me: the fabric costs about 35,000 UGX, the buttons and thread another 10,000 Ush (in total, about $23) and requires over 4 hours to make.Her profit margin is 20,000 Ush ($11).Not all her items are this expensive.Her typical profit is 5,000 to 7,000 Ush for everyday garments like school uniforms and skirts.Her backlog is extensive.She keeps a ledger for each order, accounting for costs, fabric, style, materials, client name, measurements and completion date.

In the ten years Magdalena has been a microfinance borrower, she has never missed a single loan payment or failed to pay school fees.She borrowers between 400,000 and 1,000,000 Ush ($216 – $541) depending on the current business cycle, and invests her loans in materials, fabrics, thread, machine repairs and maintenance, employee salaries and improvements to her studio.

Magdalena's beautiful new home

After years of dedicated hard work and vision, and with the loyal support of Pearl Microfinance, Magdalena has achieved unprecedented happiness, pride and success in the face of a lifetime of adversity that would render most people hopeless.All four of her children have completed their college education and are working professionals.Magdalena now cares for two disabled orphans, giving them the loving, nurturing childhood that eluded her.Her clothing business is thriving.She has money in the bank.And, her dream of building a lovely new home where old one-room buy’s quarter once stood is now a reality.

Magdalena embodies entrepreneurial and microfinance success. Hers is a story about the delicate balance between triumph and tragedy.She proves that hope, persistence and a helping hand are common threads that connect us all, and that lead us to our dreams.Magdalena’s life has woven through extremes in suffering, adversity and achievement.For me, she is an enduring symbol of inspiration on the sublime tapestry of humanity.For all of us, Magdalena illustrates the significance and importance of MDG3. She helps me see that the friction which opposes my life’s ambitions is insignificant by comparison and thus gives me the perspective to find my way forward.That is Magdalena’s gift to me, for which I am thankful.

I encourage you to look at Kiva’s partner page to learn more about Pearl Microfinance, BRAC Uganda and MCDT Sacco. You’ll discover amazing organizations staffed with teams of intelligent, purpose-driven, devoted people who are attacking MD3 and truly changing the world. Like Magdalena, they inspire me and give me hope that poverty will one day be a human condition of the past.

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